The global economy, and in particular the Developing and Transition Economies, is currently facing two major challenges. The first challenge is sluggish growth leading to stagnant global trade, subdued investment and increasing policy world-wide uncertainty. The second challenge is being that the world is on the brink of the fourth industrial revolution which is expected to drive significant change to global industry and business models and possibly lead to a net loss of jobs.

Countries can only influence their own policies and ability to adapt to the changes that are expected to take place. African countries have generally made forward strides in adopting and/or revising investment laws in order to attract FDI inflows, particularly, into the manufacturing sector and providing incentives for investment. More can be done, however, in the area of facilitating investment by making it easier to invest in the various countries. African countries need to focus on improving their rankings in the Corruption Perceptions Index, which dropped significantly during 2016, and the Ease of Doing Business Survey thereby promoting their countries as the country of choice for the limited available FDI inflows.

African countries can also continue to focus on utilising all available funding to improve education, health and infrastructure so that they are prepared, to the best extent possible, for the fourth industrial revolution and to derive the best benefits available from the changes to come.

Africa in a Changing Global Environment

This report considers Africa’s position in the current global economic environment and measures how Africa ranks, by individual country, by region and as a continent, with competing Developing and Transition Economies with regards to the following areas:

• Competitiveness (as measured by The World Economic Forum’s Global Competitiveness Report, 2016-2017)

• FDI inflows (as measured by the UNCTAD World Investment Report, 2016 and UNCTAD Global Investment Trends Monitor Reports)

• Ease of doing business (as measured by The World Bank’s Ease of Doing Business Survey, 2016 and the Fraser Institute Annual Survey of Mining Companies Policy Perception Index, 2016)

• Corruption (as measured by the Transparency International Corruption Perception Index, 2016)        

• GDP growth (as measured by BMI Research’s GDP growth forecasts)

This Report also measures each African country and region’s ranking in terms of the RMB Global Markets Research Where to Invest in Africa Report, 2016-2017.

This Report gives insights into what direction the world economy is expected to take in the context of the current trust crisis by Developed and other economies as identified in the Edelman Trust Barometer, 2017 resulting in the recent increase in populist views by the general populations of the world.  It cites the risks to the world economy due to the resultant inward looking policies and protectionist measures as identified in the World Economic Forum’s Global Risks Report, 2017.

It also highlights the potential and expected global economic impact of the so called fourth industrial revolution as detailed in The World Bank Group’s Global Economic Prospects Report, 2017 and The World Economic Forum’s Future of Jobs Report, 2016 as well as The World Economic Forum’s Global Competitiveness Report, 2016-2017.

The fourth industrial revolution is building on the digital revolution, or third industrial revolution, that has been occurring since the 1950’s. According to The World Economic Forum, the fourth industrial revolution is characterised by a fusion of technologies that is blurring the lines between the physical, digital and biological spheres with developments in the fields of artificial intelligence, machine learning, robotics, nanotechnology, 2D printing and genetics and biotechnology.

The Report documents how Africa, as a continent, regionally and by individual country, compares to its main Developing and Transition Economy competitors as an investment prospect for the limited available foreign direct investment (FDI).

The Report further suggests the areas over which individual African countries have control and can work towards improving in order to increase their attractiveness as an FDI inflows destination and their competitiveness in order to best position themselves to cope with and take advantage of the economic benefits offered by the fourth industrial revolution.

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